Spotify Technology (SPOT) shares surged higher Monday after the music streaming app joined a host of other big tech companies in unveiling big job cuts.
Spotify said it would slash around 6% of its global workforce, or 600 jobs, in a move that will likely bring a $40 million hit in "severance related charges" to its current quarter earnings. Spotify's chief content officer, Dawn Ostroff, is also set to leave the group following a restructuring of its senior management.
"While we have made great progress in improving speed in the last few years, we haven’t focused as much on improving efficiency," said CEO Dan Ek. "We still spend far too much time syncing on slightly different strategies, which slows us down."
"As part of this effort, and to bring our costs more in line, we’ve made the difficult but necessary decision to reduce our number of employees," he added. "And while I believe this decision is right for Spotify, I understand that with our historic focus on growth, many of you will view this as a shift in our culture. But as we evolve and grow as a business, so must our way of working while still staying true to our core values."
Spotify's U.S.-listed shares were marked 2.2% higher in Monday afternoon trading following the job cut announcement to change hands at $100.22 each on the New York Stock Exchange.
Last week, Google parent Alphabet (GOOGL) added its name to the growing list of big tech companies paring back staffing in the midst of waning customer demand and a slump in advertising sales.
Google CEO Sundar Pichai informed employees of the coming job cuts through a company-wide memo, with headcount losses expected in engineering and product teams as well as upper-level management.
The move followed a similar cull at Microsoft (MSFT), which said it would slash around 5% of its global workforce, and take a $1.2 billion charge against its second quarter earnings, as it looks to 'align costs' with customer demand.
Microsoft said the cuts, which it expects to conclude in March, will result in the loss of around 10,000 jobs and a 12 cent hit to December quarter earnings, but added that it would continue to invest in areas such as AI and other advanced technologies.
Late last year, Amazon (AMZN) announced plans to reduce its global workforce by around 18,000, which began earlier this week, while Meta Platforms (META) revealed job cuts of around 11,000.
